I have a client who worked for Texas Energy Co. When this company sold the participants in their 401K and Thrift Plans were told to move them. My client moved his to a Securities Broker and opened an IRA. However, he had certain costs basis in these funds before he transferred them. In 2007 he began to receive a distribution of this account with code 7 on the 1099R. Which form should be used to show amount recovered tax free..Simplified Method or Form 8606?
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Last edited by BillV; 09-15-2010, 02:28 PM. Reason: To change title to Non-taxable portion of distribution -
Use the form 8606 for IRA's.
Simplified method works only with pensions and annuities.ChEAr$,
Harlan Lunsford, EA n LA -
Agree with ChEAr$
Page 13-21 in TTB says:
Nondeductible qualified plan contributions.
When nondeductible employee contributions are included in a rollover from an employer qualified plan into a traditional IRA or SEP-IRA, the nondeductible portion should be added to the basis of the IRA on line 2, Form 8606.Comment
Comment